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The company's two top security executives funneled $1 million in illegal kickbacks through dummy corporations they set up to accept money from several companies doing business with Rooms to Go, federal prosecutors say.

But on Tuesday one of those two executives, Brian W. Ouellette, 50, a former Hillsborough sheriff's detective who served as Rooms to Go's security director, plead guilty to federal charges for his part in the scheme.

Both Ouellette and former Rooms to Go security executive James B. Loftus Jr., also a former Hillsborough detective who hired Ouellette at Rooms to Go, are cooperating with prosecutors and have agreed to testify against other potential targets of the investigation.

Loftus, 59, who lives in the Atlanta area, had previously pleaded guilty and was sentenced to two years in prison earlier this month. Ouellette, a Hillsborough resident, will be sentenced later this year and faces 20 years on each of the five charges he faces.

For Ouellette, those charges include conspiracy and honest services mail fraud. He is free on his own recognizance pending sentencing and declined to comment.

Prosecutors and court documents show that Loftus, who also served as Rooms to Go director of security before he hired Ouellette, was given wide latitude by the retailer over security matters.

In 2002 a plainclothes investigator for Rooms to Go told Ouellette and Loftus he wanted to form his own security company to provide guards for Rooms to Go. In exchange for the contract, the investigator agreed to pay 2.5 percent of his gross in kickbacks to the two men, documents show.

Prosecutors say Ouellette received $550,456 and Loftus got $287,562 and hid the conspiracy from Rooms to Go.

Ouellette engaged in a separate scheme, prosecutors say, to get kickbacks from security vendors hired to collect information about other Rooms to Go workers who served as confidential informants in employee theft investigations.

Prosecutors say Ouellette received an additional $254,336 in kickbacks in this way.

In 2006, Loftus decided he could not live with the burden of his crime any longer, his attorney said in court papers. Suffering from severe depression, his attorney said, Loftus stopped accepting kickbacks.

"This was still a secret conspiracy," attorney Seth Kirschenbaum wrote in a sentencing memo. "Loftus had no reason to withdraw from the conspiracy other than his having reached a personal decision that he was through with it."

In 2007, Loftus was called into the office of Rooms to Go's general counsel, Mike Kettle.

Kettle had heard Ouellette was getting kickbacks and asked Loftus if he knew anything, documents say. After first denying knowledge, Loftus confessed to Kettle and provided documentation about the kickbacks.

Loftus kept cooperating with Rooms to Go even after he was fired, Loftus' attorney said.

William R. Levesque can be reached at levesque@sptimes.com or (813) 226-3432.